Working Paper 2016-1

How Can Cryptocurrency and Blockchain

Technology Play a Role in Building
Social and Solidarity Finance?
Brett Scott

prepared for the UNRISD Workshop

Social and Solidarity Finance: Tensions, Opportunities and
Transformative Potential in collaboration with the Friedrich-Ebert
Stiftung and the International Labour Office

February 2016

UNRISD Working Papers are posted online

to stimulate discussion and critical comment.

The United Nations Research Institute for Social Development (UNRISD) is an autonomous
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Contents
Abstract ............................................................................................................................. ii
Acronyms ......................................................................................................................... ii
Introduction ...................................................................................................................... 1
A Primer on Cryptocurrency ............................................................................................ 1
The nature, stability and security of Bitcoin tokens ..................................................... 2
Is Bitcoin money? ..................................................................................................... 3
Perceived risks: Volatility and safety ....................................................................... 3
Regulation, tax and accounting ................................................................................ 4
Narratives of cryptocurrency empowerment ................................................................ 4
Remittances (and small-scale international trade) .................................................... 5
As a quasi-bank account for the unbanked ........................................................... 6
Counter-narratives ........................................................................................................ 7
Techno-Colonial Solutionism from Above? .................................................................... 8
Forking Critique: Alternative Cryptocurrencies ............................................................... 9
Blockchain 2.0 Technology ............................................................................................ 11
Techno-Libertarian Evangelism? ................................................................................... 12
The Emancipatory Potential: Collaboration at Scale? .................................................... 13
Individualistic vs communitarian readings of blockchain technology ................... 15
The everyday pragmatics of decentralized blockchains ......................................... 16
Recommendations for Further Research ........................................................................ 17
References ...................................................................................................................... 18
Websites ..................................................................................................................... 18
Books and articles ....................................................................................................... 18

Abstract
The decentralized digital currency Bitcoinand its underlying blockchain
technologyhas created much excitement in the technology community, but its
potential for building truly empowering social and solidarity-based finance has yet to be
tested. This paper provides a primer on the basics of Bitcoin and discusses the existent
narratives about the technologys potential to facilitate remittances, financial inclusion,
cooperative structures and even micro-insurance systems. It also flags up potential
points of concern and conflict; such as the tech-from-above solutionism and
conservative libertarian political dynamics of some of the technology start-up
community that surrounds Bitcoin. As a way of contrast the paper considers
blockchain 2.0 technologies with more overtly communitarian ideals and their
potential for creating cooperation at scale. It concludes with suggestions for future
research.

Author

Brett Scott is an independent researcher and consultant on alternative finance and

financial reform. He is the author of The Heretics Guide to Global Finance: Hacking
the Future of Money (Pluto Press: 2013). He is a senior fellow of the Finance Innovation
Lab in London, writes for publications such as The Guardian and appears as a
commentator on media channels like the BBC.

Acronyms
DAO
ICT4D
IT
PIN
SSF
UNRISD
US

Decentralized autonomous organizations

Information and Communication Technology for Development
Information technology
Personal identification number
Social and solidarity finance
United Nations Research Institute for Social Development
United States

ii

Introduction
The rise of Bitcoin has been ambivalently received by many in international
development circles. The cryptocurrency is based on collaborative open source
principles and peer-to-peer networks that suggest a commitment to social solidarity and
mutual aid, but Bitcoins image has become associated with speculators, profit-driven
entrepreneurs, market-fundamentalist libertarians and technology fetishists (Yelowitz
and Wilson 2015). The scene or community around Bitcoin seemingly has little
connection to the gritty social reality of many in poorer countries. The frequently
aggressive rhetoric within the community, as well as the inequality of access and wealth
within the system, seemsat first glanceto clash with the ideals of those in social and
collaborative economy movements.
Despite this, the question of whether Bitcoin can be harnessed to empower marginalized
communities and build new means of solidarity-based finance remains unanswered.
This paper sketches out the contours of some key issues that social and solidarity
finance practitioners should consider when thinking about cryptocurrency technology. It
is intended to provide a primer on the basics of Bitcoin, and to flag up existent
narratives on the technologys potentials and limits.
First, it considers claims made by Bitcoin proponents concerning the positive role
Bitcoin can play as a tool of financial inclusion, or as a tool to build new systems of
property rights in countries with unstable governance. It also considers technical and
political critiques of these claims.
Second, the paper looks at the attempts to design new cryptocurrenciessuch as
Faircoinbased on explicitly cooperative and social justice principles.
Third, the paper considers the emergent wave of blockchain 2.0 innovation, in which
the underlying blockchain technology of Bitcoin is expanded into realms like share
issuance and micro-insurance. The original Bitcoin community made much out of the
trustless nature of the technology (Miscione and Kavanagh 2015)the fact that it
does not rely on trusted central intermediariesbut newer groups are expanding the
vision into one of trust-enabling decentralized cooperatives, or distributed
collaborative organizations.

A Primer on Cryptocurrency
To understand the Bitcoin system, it is useful to sketch out the similarities and
differences with the normal bank-run electronic payments system. In the normal system:
1. A person has an account number at a bank.
2. They have a way of proving that they control that account numberfor
example, a PIN code.
3. The bank, in turn, has a data record of how much money is attributable to that
account number, thereby keeping score of the persons money on a private
internal database or ledger.
4. The person can then use an electronic communications system to identify
themselves to their bank as the authentic account holder, and can request for
the money associated with their account number be transferred to someone
elses account at a different bank.
1

UNRISD Working Paper 20161

5. This then spurs the bank to edit their ledger of accountschanging the
persons scoreand to tell the recipients bank to do the same. The process is
a little more complex than this, but in effect the money moves via a series of
private databases being edited.
The normal bank payments system thus works by a limited set of private intermediaries
editing private databases that they control, and then informing the account holders that
the transactions have occurred (e.g. Your new balance, recorded in our datacentres, is
1,240).
The Bitcoin systemlike the normal bank payments systemis intended to move
monetary tokens between people through the changing of account entries on databases,
but it has two immediate differences. First, the database that is used to record payments
between people is public, rather than the privately held account databases of the normal
banking system. Second, the intermediaries that change that database are a decentralized
network of people (miners) running special Bitcoin software, rather than banks
running their own private software systems. 1
Thus, the Bitcoin system, at its most simple, consists of a widely distributed, and highly
visible, public ledger (or database)colloquially referred to as the blockchainthat
people can use to record transactions of digital tokens between themselves. The
database thus keeps score of their tokens on the system in a highly public and
transparent 2 way.
In the Bitcoin system:
1. A person wishing to make a payment has a public address (akin to an account
number).
2. They have a way of controlling that public address through the use of a private
key (roughly akin to a PIN number)
3. They then use an electronic communications system (the internet) to identify
themselves to the Bitcoin network, and request that digital tokensassociated
with their public addressbe moved to someone elses public address.
4. This then occurs by a change made to the blockchain ledger by a set of
participants colloquially known as miners. 3 It is beyond the scope of this paper
to describe the exact means by which this happens, but the process involves
the miners using their computing power to validate the transactions.
5. The two parties who control the public addresses can then see these changes,
proving that the tokens have moved from one address to the other.

The nature, stability and security of Bitcoin tokens

Note that all the Bitcoin system actually does is enable digital tokens to be moved
between participants, with the help of miners who volunteer their computer power to
move the tokens around. Whether such digital tokens are perceived to have value or not

1
2

For a detailed technical description of the Bitcoin system, see Antonopoulos 2014.
Much media attention on Bitcoin has focused on the fact that people can anonymously transact using the system,
which seems to run counter to the claim of transparency. Note though, that the means by which such anonymous
transactions are achieved is through the use of a highly transparent public ledger. All transactions on the system
can be seen be everyone, but attributing a specific persons identity to any particular transaction is difficult.
These miners can be thought about as a decentralized network of clerks who check to see that participants actually
have the funds they claim to have, and who then record a change to the decentralized blockchain ledger. In a bank,
the same task would be undertaken by checking to see that someones account balance had enough in it to make a
payment, and then changing their balance to make that payment.

Can Cryptocurrency and Blockchain Technology Play

a Role in Building Social and Solidarity Finance?
Brett Scott

is a separate, and more complex, issue. Some of the first questions that have been asked
about bitcoins are:

What is the nature of these tokens? Are they money? Where does their value
come from?
Is this perceived value stable, or prone to volatility?
Is the system safe, or prone to hacks and fraud?

Is Bitcoin money?
When addressing the first question, it is important to note that our normal money is also
just tokenswhether in a digital form or in a symbolic paper or metal formwhich
people move around either by editing databases (electronic money) or by literally
handing over the symbolic physical representation (cash). The construction of the
perceived value of the euro or the yen is a historical process involving deep cultural and
political dynamics.
The value of a US dollar is underpinned by enormous network effects, the fact that
hundreds of millions of people implicitly agree that the tokens represent value and the
fact that the tokens are deeply anchored in a vast real economy. The fact that so many
people are interdependently locked into usage of such tokens makes it incredibly
difficult for anyone to deny their perceived value, and if they do so they will tend to find
themselves excluded from economic life. To get such tokens into such a central
economic position does not come easilyit involves deep interplays between state
power, central banks, commercial banks, institutions that protect property title, and the
redeemability of legal tender to pay taxes and other debtsbut once a monetary
standard is established it is very difficult to dislodge. 4
Bitcoin, by contrast to a token like the South African rand, has no geographically and
politically discreet real economy in which it is dominant. It thus does not tend to be a
primary unit of pricing in any economyvery few vendors explicitly price their goods
in terms of Bitcoin as a unit of accountand it is also not widely perceived as a means
of exchange. Thus, while it has the potential to be a currency unit, in practice few
people actually use, or perceive, Bitcoin as money in a traditional sense. 5
This has led some national authorities to characterize it as a digital asset rather than a
currency. In this sense it bears some resemblance to gold, which similarly has ambiguity
as to whether it should be perceived as an asset or as a form of money. For now, though,
it suffices to say that (i) Bitcoin is a digital token that can be moved between parties,
and (ii) the token has market value in terms of major national currencies (the token can
be exchanged for dollars, pounds and other currencies) and (iii) it is sporadically used
albeit often in small amountsin exchange for real world goods and services.
Perceived risks: Volatility and safety
The question of what underpins Bitcoin tokens perceived valueand the related
question of its price in terms of fiat currenciesis beyond the scope of this paper. 6 It
suffices to say for now that when Bitcoin first started it was seen by many as a
mischievous, subversive, and slightly mysterious, experiment, rather than a serious
4
5
6

We do see situations in which these token systems break down as a result of institutional distress, as in the case of
the Zimbabwe dollars disintegration through hyperinflation from the late 1990s.
For discussions about whether Bitcoin is money, see Yermack 2015; Selgin 2015; Weber 2014; Lo and Wang 2014;
and Bergstra and Weijland 2014.
For more on this topic, see Cheah and Fry 2015; Polasik et al. 2015; Hayes 2015; and Ciaian et al. 2015.

UNRISD Working Paper 20161

commercial instrument. The digital tokens went through a fetishization process in which
they began to get imbued with imagined value by a small, dedicated group of
evangelists, who in turn paved the way for speculators to get involved, and for media
outlets to run stories (Glaser et al. 2014). This in turn opened up the tokens usage to
more ordinary people, business owners and entrepreneurs. Today, perhaps the most we
can say is that the digital tokens have a perceived value contingent upon their
specialized usage among specialized communities, and that the construction of this
perceived value is an ongoing process that develops as more players get involved.
One key element of this, though, is thatin contrast to locked-in state currency
systemsthe perceived value (as measured in terms of other currencies) has fluctuated
greatly over time. This volatility creates a chicken-and-egg scenario: if more people got
involved, the value of the tokens would stabilize, because the larger the user base, the
less influence any one user would have in influencing the price. 7 But many people shy
away from using Bitcoin because of the volatility.
Another perceived risk that keeps people away is the fact that the Bitcoin system has
been subjected to various security breaches, mostly involving third-party serviceslike
exchanges where you can buy bitcoins in exchange for fiat currenciesbut also
involving hacks of private computers where people have Bitcoin wallets, the software
they use to interact with the system. It is important to note, however, that as the
community around Bitcoin has matured and expanded, the security standards have
steadily increased. 8 Many new markets are initially subject to cowboy or rogue
operators who gradually get pushed out by more formal actors over time.
Regulation, tax and accounting
Lastly, it is important to point out that within cryptocurrency scholarship and practice,
there are a number of ongoing debates concerning how Bitcoin should interface with
mainstream regulatory, legal and tax regimes in different jurisdictions. This includes
practical questions on:

how to tax Bitcoin transactions (including VAT and income tax); 9

how to account for Bitcoin in formal financial statements; 10 and
how to regulate it: is a provider of Bitcoin services a financial services
company, for example? 11

All three of these strands involve a question of how to categorize Bitcoin. Taxation,
accounting and regulation can shift depending on whether it is seen as a currency, an
asset (or investment), a commodity or a digital service. Different countries are at
different stages of advancement and sophistication in resolving these conundrums.

Narratives of cryptocurrency empowerment

Bitcoin initially rose to prominence in advanced industrial nations like the United
States, and remains most widely used within such countries. Nevertheless, a discursive
theme that has developed is whether Bitcoin can be applied within the context of
7

8
9
10
11

This is actually a characteristic present in many new and relatively illiquid financial markets, which are initially
subject to jagged price fluctuations but gradually smooth out over time as more players get involved, or as the
market matures.
Of all the academic literature on Bitcoin thus far, technical analyses of the systems security are perhaps the most
prominent and numerous. To browse this literature, see http://bit.ly/BitcoinResearch.
See Bal 2015.
See Raiborn and Sivitanides 2015.
See Levin et al. 2015; Ponsford 2015; and Tsukerman 2015.

Can Cryptocurrency and Blockchain Technology Play

a Role in Building Social and Solidarity Finance?
Brett Scott

international development, financial inclusion and bottom-of-the-pyramid business

efforts. A number of narratives about why it may be empowering for people in less
developed countries has emerged. 12 This includes:

Bitcoin as a means to facilitate low-cost remittances for those seeking to

transfer small amounts of money internationally
Bitcoin as a means for an otherwise excluded individual to have a
decentralized global bank account, accessible simply by downloading an open
source wallet from the internet, rather than having to set up with a formal
financial institution
Bitcoinor the technology that underpins itsubsequently providing the
basis for a richer set of financial services

Remittances (and small-scale international trade)

Bitcoin has the potential to be used as an intermediary currency between other, more
dominant, currencies, and thus may be useful for remittances. Rather than using
companies like Western Union, a Filipino worker in New York might use a service that
transfers US dollars into bitcoins and enables a family member in the Philippines to
withdraw pesos on the other side. In order to make this work, there needs to be a
liquid market for both dollars-to-bitcoins, and bitcoins-to-pesos. In the case of the
Philippines there already are start-ups like Rebit 13 and coins.ph. 14 An example in Kenya
is BitPesa. 15
International remittances are under stress in various ways. For example, in Somalia the
Hawala systems 16 have been under threat of being shut down due to concerns on the
part of banks and states that they are financing terrorists. Remittances are a vital
element of the Somalian economy, but companies like Dahabshiil that provide this
crucial service have been targeted for exclusion by banks in places like the United
Kingdom which has a large Somalian population. Bitcoin theoretically could be used to
bypass such banks to form an alternative remittance channel.
Bitcoin also has potential to facilitate small-scale international commerce. Local
merchants in poorer countries may struggle to access international payments systems to
sell their goods abroad. For example, a rural crafts cooperative from Zimbabwe might
struggle to set up a website with an integrated credit card payments system, but getting a
Bitcoin address might enable them to sell products in exchange for Bitcoin tokens,
thereby avoiding traditional e-commerce systems (which often involve having to set up
a merchant account with a formal bank). Provided that a market exists to exchange such
bitcoins received in trade back into a usable local currency, this could prove useful. For
example, imagine a scenario where a small-scale independent producer of sustainable
cocoa butter products sold them to US clients in exchange for Bitcoin tokens that were
then redeemed for localor foreigncurrency on a Bitcoin exchange. Likewise, a
small-scale non-governmental organization can easily set up to receive Bitcoin tokens
as donations.

12
13
14
15
16

See Folkinshteyn et al. 2015; Maloumby-Baka and Kingombe 2015; Ammous 2015; Clegg 2014,
See https://rebit.ph/.
See https://coins.ph/.
See https://www.bitpesa.co/.
Informal money transfer systems that are not based upon formal, centralized financial institutions (like banks), but
rather on networks of trusted brokers.

UNRISD Working Paper 20161

As of yet, however, there appears to be little robust empirical evidence on the extent to
which such use of Bitcoin is occurring. There are many anecdotal examples (found on
online forums, media sites and social media feeds) of people using it to make
international transfers, or using it to buy goods internationally from small merchants,
but no systematic studies beyond proxy studies of Bitcoin users. 17
As a quasi-bank account for the unbanked
In the aforementioned examples, Bitcoin was used as an intermediary currency to
facilitate transfers between other currencies. This may assume the user has access to a
bank account, but struggles with the cost and difficulty of international transfers or ecommerce systems. It is possible, however, to focus on the Bitcoin system as a type of
decentralized bank in itself. If a person has a personal computer or a mobile phone that
can be used to download a Bitcoin wallet, they can obtain a public key that represents
their account on the global system. This in turn comes to resemble a quasi-bank account
in which you can build up savings. In the context of a country with poor banking
infrastructure and reliance on cash, such a technology couldhypotheticallybe a
safer way to hold money, and a convenient way to transfer money in everyday
transactions. Rather than merely be useful for remittance systems, Bitcoin could be an
infrastructure for everyday local payments in precarious, informal settings.
In this sense, Bitcoin has potential to complement, or compete with, mobile banking
applications. M-PESA has already established itself as a leading mobile banking service
in Kenya, enabling up to a quarter of the working population to use mobile phones as a
type of digital wallet to transfer currency by using text messages. The politics of mobile
banking are tricky, though, involving struggles between regulators, banks and telecoms
companies. In Nigeria, mobile money has developed more slowly, partly due to
Nigerian banks lobbying regulators to only allow banks to operate mobile money
services, rather than telecoms companies (IFC 2011). Bitcoinby bypassing the
incumbent institutions with their internal politicsmight offer informal solutions that
operate beyond the formal channels used by incumbents.
The idea that mobile Bitcoin wallets can serve as a type of bank account intersects with
a broader suggestion that Bitcoin can be used by individualsincluding richer
individualsas a replacement currency in countries with unstable national currencies.
Thus, an individual can escape from their own sinking currency system and climb
aboard a different life-raft system. In practice, this is likely to take the form of
individuals obtaining Bitcoin as a backup or reserve asset within a diversified portfolio
of other assets.
Garrick Hileman (2015) of the London School of Economics has drawn up a Bitcoin
Market Potential Index, which ranks Argentina, Venezuela and Zimbabwe as the
countries with citizens most likely to adopt Bitcoin in future. In the case of Argentina
and Venezuela, the dominant factor seen to spur future usage is the perceived risk of
inflation in the national currency, while in the case of Zimbabwe the dominant factor is
the strong presence of informal black markets. Hileman argues that within such a setting
the anonymity afforded by cryptocurrencies can help those who engage intechnically
illegalinformal business transactions.
This of course presumes that Bitcoin tokens get to a point where their perceived value
remains stable. Bitcoin is far from being at this stage, but the use-case makes most sense
in the context of an existing state currency that is very unstable. Bitcoin might be
17

See Yelowitz and Wilson 2015; Bohr and Bashir 2014; Hernandez et al. 2014,

Can Cryptocurrency and Blockchain Technology Play

a Role in Building Social and Solidarity Finance?
Brett Scott

volatile and subject to unstable bouts of speculation, but it nevertheless has attracted a
resilient network of players from all over the world, including players from advanced
industrial nations like the United States. From the perspective of someone in a highly
unstable country, such a digital token might still appear as being relatively safer than
their own currency, or at least a type of hedge or means of diversification. 18

Counter-narratives

Bitcoin proponents claims about the cryptocurrencys potential to create financial

inclusion do not go unchallenged. One pushback comes from traditional conservatives
within security industry circles who suggest that Bitcoin-based systems will be used for
money laundering and financing terrorists (Fernholz 2015), echoing similar concerns
about systems like Hawala. In July 2015 it was discovered that Hacking Teamthe
Italian producers of government surveillance spywarewere working on cracking
Bitcoin systems on behalf of government clients (Higgins 2015). There is a geopolitics
of Bitcoin that potentially stands in the way of it being used freely for financial
inclusion.
Equally important in the case of remittances, though, are simpler market factors.
Remittances depend on a liquid market existing between Bitcoin and the currency of the
recipients country. This can be difficult because liquid currency markets tend to
develop in countries with strong economic fundamentals, well-designed formal market
institutions, and well-developed local intermediaries. Think, for example, of wellcapitalized investment banks using advanced IT systems to trade the highly liquid
pound-dollar currency market. Countries that depend on remittances do not tend to have
such strong market institutions for their normal currency, never mind an entirely new
internet currency.
Furthermore, a mobile money system like M-PESA in Kenya succeeded partly because
it leveraged an existing network of vendors and agents. Bitcoin does not somehow
obviate the need to build extensive networks of agents in remote locations who are
prepared to give physical cash to people seeking remittances in a local currency.
More generally, there remain doubts as to the viability of Bitcoin within countries with
poor infrastructure and technology access. Besides the issue of establishing trust in an
otherwise poorly understood digital token system, there needs to consistent internet
availability and efficient electrical grids. There also ideally needs to be wide availability
of smart phones: most Bitcoin mobile wallets cannot run on an ordinary mobile phone,
although companies like 37 Coins were trying to develop systems to allow older phones
to control Bitcoin via SMS messages. 19
Even if these hurdles were to be overcome, we need to recognize that merely providing
the potential for a Bitcoin account and payments service does not deeply address the
problem of financial exclusion. It is true that an element of financial exclusion is the
situation of people not having access to bank accounts to save money or participate in
payments services. But, more crucially, exclusion generally means not having access to
credit, which may be related to not having stable income streams, or access to formal
property titles to act as collateral.

18
19

For more analysis of Bitcoin as a hedge within a more traditional portfolio of financial assets, see Dyhrberg 2015;
Brire et al. 2015.
The company has now shut down, but see https://www.37coins.com/en/

UNRISD Working Paper 20161

The field of financial inclusion thus seeks to operate on multiple fronts. For example,
small-scale rural farmers might get paid physical cash in lump sums after harvests, and
have to hold that, presenting a security risk. One goal of financial inclusion might be to
enable the farmer to deposit that into a current account. But this, in turn, is seen as also
potentially making them eligible for auxiliary services like microloans and insurance.
Banks, however, might avoid rural areas or poor urban areas with high levels of
informal economic activity, simply because it is too costly to roll out services relative to
the returns available. One possible route to financial inclusion is thus to look beyond
profit and to create financial institutions built on social and solidarity principles.
Another route is to stay within the profit paradigm and focus on trying to lower the costs
of services via technologysuch as mobile banking technologyand to therefore boost
potential profits and incentives for providers of financial services.
As a relative newcomer to this field of financial inclusion, Bitcoinand the community
that surrounds ithas yet to be proved useful on any of these fronts. It does provide a
potential alternative payments system, but has yet to show how this will translate into
financial inclusion more broadly. Going forward, one interesting area of development is
in the realm of blockchain 2.0 applications, the potential use of Bitcoin-style technology
to provide services like insurance contracts and share issuance. This is discussed in
more detail on page 11.

Techno-Colonial Solutionism from Above?

There is also a more political critique though. Those that position Bitcoin is a life-raft
currency implicitly seem to suggest that it is desirable to escape to the internet rather
than seek more fundamental solutions to a countrys underlying problems on the
ground. Advocating that a vulnerable country adopt Bitcoin is at best likely to be a
short-term solution, and at worst just distracts countries from strengthening already
fragile institutions. It is one thing to use Bitcoin to provide a counter-power to the
powerful cartels of banks in nations like the United States, but in a country like
Zimbabwe the real need may be to strengthen the integrity of the banking system,
something that can only be achieved by hard, long-term political battles.
Escaping weak local institutions might help individual people, but does little to
empower the broader social majority who remain reliant on the existing systems. Those
who are most likely to seek escape are, perhaps, social elites with high education, access
to technology and capital to protect. The rhetoric of cryptocurrency superiorityoften
articulated by cryptocurrency start-upseven has neocolonial tinges: are local elites
within fragile countries being encouraged to buy into a forget your local systems, rely
on our technology narrative articulated by Western tech gurus?
In the minds of such technologistswhether hard-edged businesspeople or progressive
Silicon Valley tech optimiststechnology is often viewed as a market-driven force for
pragmatic problem-solving. Viewed through such a solutionist 20 lens, the world
appears in apolitical terms as a series of things that have been solved and things that
remain to be solved with technology-driven enterprises. This technology-as-saviour
narrative is essentially top-down in natureit is imagined that the problems of people
in poorer countries would be solved by the optimistic entrepreneurial drive of
American Stanford graduates. It is sometimes exemplified in generic ICT4D
(Information and Communication Technology for Development) imagery of
20

A term associated with the tech critic Evgeny Morozov. See his 2013 book To Save Everything, Click Here:
Technology, Solutionism, and the Urge to Fix Problems that Don't Exist.

Can Cryptocurrency and Blockchain Technology Play

a Role in Building Social and Solidarity Finance?
Brett Scott

marginalized Masai people huddled around a computer in a village, or a Vietnamese

rice paddy farmer smiling at a smart-phone.
Technology solutionism can be contrasted to more holistic anthropological perspectives
concerned with understanding the socially embedded use of technology in particular
political and cultural settings. Technology does not operate in a vacuum, and Bitcoin
systems do not just descend on poorer countries for the empowerment of all. The
solution gets sold by particular people and adopted by particular people within
particular contexts.
More generally, the narratives around financial inclusion, microcredit and the
unbanked often have the same solutionist ethos. Is financial exclusion really an
unfortunate and avoidable problem in search of a profitable technological solution, or is
it an integral part of an unequal economic system? Should the end goal really be to
bring marginalized people into the normal financial markets, or should the focus be on
creating meaningful alternative institutions based on principles of social solidarity?
Right now, much of the Bitcoin community appears ambivalent about where they stand
on that. Bitcoin certainly is an alternative, but is it just an alternative way of doing
business-as-usual?

Forking Critique: Alternative Cryptocurrencies

One phenomenon within the cryptocurrency space is the use of the underlying source
code of Bitcoin to create alternative cryptocurrenciesor alt-coinswith slightly
different characteristics to Bitcoin (Ong et al. 2015). While some of these forks 21
have been opportunistic attempts to make speculative profits, others are explicitly
designed to address problems the designers see in Bitcoin, and thus often embed
critiques of the Bitcoin model. For example, Freicoin 22 was an attempt to deal with the
tendency for people to hoard bitcoins by introducing deliberate inflation (via
demurrage) into the system. Others have less intensive mining processes, or have
explicitly attempted to build a different culture around their currency, as in the playful
non-competitive culture of Dogecoin. 23
Regardless of these alterations, cryptocurrencies in general have become associated
with free-market thought. In particular, they have become associated with the hyperindividualism of conservative libertarianism, some adherents of which see
cryptocurrency as a more efficient means to facilitate trade within a pure capitalist
model (Golumbia 2015).
Such champions of cryptocurrency may argue that the financial sector rips off
customers, but rather than viewing this as a normal feature of profit-driven business
within a naturally political marketplace (constructed over time in incremental fashion by
politicized human institutions), the problem is often seen to be the infringement of the
political into an imagined apolitical (and ahistorical) realm of the market: banks are
abusive because they are too intertwined with the political system, which stymies the
workings of what would otherwise be a neutral free-market. The way to solve this is
thus to disintermediate them via apolitical cryptocurrency technology.
21
22
23

In open source software culture, a fork occurs when someone takes the code of an existing application and uses it
as the basis for a new application.
See http://freico.in/.
See http://dogecoin.com/.

UNRISD Working Paper 20161

To those with a more left-wing libertarian impulse, though, cryptocurrency is interesting

because it has features that potentially allow for non-hierarchal self-organization and
peer-to-peer collaboration within a communitarian network structure. There are thus
emergent attempts to build cryptocurrencies that can be used as a means of exchange for
explicitly cooperative and collaborative enterprises that exist outside the logic of normal
market processes (see De Filippi 2015).
One example of this is Faircoin, 24 spearheaded by Fair.Coop, an initiative started by
Spanish activist Enric Duran. The project is still at an early stage, but Fair.Coop is
seeking to establish Faircoin as a global cryptocurrency to be used for transfers among a
global cooperative network. Once established, it is believed that the global currency can
also be used as the backing for more local mutual credit systems. As a hypothetical
example, imagine a commune in Barcelona sending Faircoin tokens in solidarity to a
farmers cooperative in Moldova, who in turn can use that as the basis for a more local
mutual credit system to help individual farmers within the cooperative.
In seeking to utilize cryptocurrency technology outside of a capitalist model, Faircoin is
explicitly aligned with principles found within left-wing anarchism and autonomism. It
has a much stronger focus on collaborative solidarity and autonomist self-governance,
viewing equality and redistribution as more important than rigid protection of historical
property rights.
Such an approach runs contrary to many financial inclusion narratives that suggest that
economic inequality is due to external factors that stymie the efficient workings of
markets, thereby creating market failures. For example, market-based approaches may
identify poorly defined property titles as a cause of market exclusion, and therefore of
poverty. The financial inclusion practitioner operating within this framework may seek
to rectify that, in order to extend market systems into areas where they do not currently
operate well. The theory is that this will give individuals within that situation a better
chance of competing within the normal market.
A project like Faircoin, on the other hand, starts from the assumption that, while formal
market systems may be a source of economic growth and individual enhancement, they
are simultaneously the source of social inequality, individual alienation and community
disintegration. Thus, rather than trying to find narrow solutions to individual hardship,
initiatives like Faircoin seek to create alternative economic systems that bypass normal
markets, and that rewrite the deep level rules of economic engagement. In particular
they place heavy emphasis on the basis of economic life being mutual cooperation and
solidarity, rather than individual competition for narrow economic success.
What makes the cryptocurrency element of this interesting, is thattraditionally
autonomist communities have often retreated to small-scale localism as a means to
foster close human relationships. The vision of projects like Faircoin, on the other hand,
is to build large-scale networks of solidarity-based collaboration using technology. It is
in potentially enabling such collaboration at scale that cryptocurrency technology
begins to look like a force for radical economic alternatives.

24

For a technical white paper on this, see https://chain.fair-coin.org/download/FairCoin2-Draft.pdf.

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Can Cryptocurrency and Blockchain Technology Play

a Role in Building Social and Solidarity Finance?
Brett Scott

Blockchain 2.0 Technology

Cryptocurrencies are subject to all manner of ideological battles, but one thing most
interested parties agree on is that the underlying concept of a decentralized public
ledger, collectively maintained by a network of participants is very important. This has
led to an interest in blockchain 2.0 projects, or the use of a blockchain ledger to record
things other than currency transactions (Swan 2015).
It is useful to think of a blockchain as a database that incrementally gets built up by a
network of participating parties who run the same software, and that is subject to the
constraints and rules set by the underlying software they run. A blockchain, as the name
suggests, gets built up by blocks of data gradually being chained together. It could
almost be imagined as a spreadsheet that is gradually built by new cells being chained
on. A blockchain database continues to be built and maintained so long as the software
continues to be run. Thus, unlike a centralized database held by a single entity, it
continues to stay alive even if individual participants pull out (or go bankrupt, for
example). It creates an indelible record, resistant to tampering by any individual party.
Furthermore, if you tweak the code of the underlying software being run by participants,
the nature of the resultant blockchain changes, opening the possibility of creating
blockchain databases storing all manner of diverse data, including, for example,
property titles, contracts, shares (Lee 2015), voting decisions (Noizat 2015), or even
reputation scores (Scott 2015b). Groups like Ethereum, Counterparty and Blockstream 25
are working on building platforms to allow people or start-ups to implement blockchainbased systems. For example, Provenance is a start-up attempting to use the Ethereum
system to create a highly transparent ledger of global corporate supply chain data. 26
At the cutting edge of the scene are experiments with smart contracts, which are small
bundles of codeor scriptsthat can be recorded on a blockchain, and that participants
can interact with in order to undertake simple tasks (Wright and De Filippi 2015). For
example, we might code a simple insurance contract (see Mainelli and Von Gunten
2014). Imagine a coded blockchain-based script that is activated when two parties send
bitcoins to an escrow Bitcoin account that is controlled by the script, and which will
release the bitcoins in the future to whoever wins a bet on the average level of rainfall
over a certain period. This smart-contract is programmed to read data from weather
agencies, and after a set amount of time releases the bitcoins from the escrow, sending it
to a farmer who requires protection against low rainfall. This is a blockchain-based
weather derivatives contract.
Such simple building-block contracts could be woven together to form the basis for
more complex multi-stage or multi-function entities, referred to by some as
decentralized autonomous organizations (DAOs) (Pangburn 2015). Such DAOs are hard
to conceptualize, and seem to be in the realm of science fiction to many people, but are
essentially advanced multi-stage algorithms held in play on a decentralized network of
computers, rather than controlled by a single management team.
To those with more immediate pragmatic needs, blockchain systems seem most useful
in recording simpler data. One element of blockchain systems that has captured the
interest of those with a free-market economics orientation is the way in which they may
25
26

Ethereum https://ethereum.org/, Counterparty http://counterparty.io/, Blockstream https://www.blockstream.com/.

See https://www.provenance.org/.

11

UNRISD Working Paper 20161

be used to indelibly record property rights. One frequently cited use-case for this are
land registries (Williams 2015). In countries with weak governance and record-keeping
systems, there is a problem of double-registry of land, land title fraud or uncertain title
to land, something that could potentially be tackled with a blockchain system that
indelibly records land title in a definitive public manner. Indeed, in 2015 Honduras
announced a deal with American company Factom 27 to develop a blockchain-based land
registry (Chavez-Dreyfus 2015).
In an (extraordinarily titled) interview in Forbes called How Bitcoin will end world
poverty (Forbes 2015), Brian Singer suggests that such blockchain technology is the
ultimate way to realize Hernando de Sotos vision of building strong property rights in
informal economies. If people are given identities and titles to property, otherwise inert
capital can be activated. Property title can be used as collateral, enabling cheaper bank
lending to informal entrepreneurs.
This analysis rests on the assertion that, provided that property and contract are well
protected, market and capitalization processes will help lift people out of poverty,
bringing forth the hidden value of informal economies. But, instead of hoping for a
democratically governed state to optimize these market processes, the povertyeliminating potential of property and markets might be activated by replacing weak state
institutions with technology, another form of political escape.
It is unclear, though, that such blockchain registries necessarily solve underlying
problems. In places that experience issues like uncertain land title, there tend to be weak
institutions that give rise to the uncertainty in the first place. In such a context, merely
presenting a technology that can be used to record claims means little unless there are
strong legal institutions that recognize the recorded blockchain claims, and strong
procedures in place for who gets to makes the claims. There is a certain irony here.
Blockchain technology is potentially most useful in situations where there are weak
institutions and parties who cannot easily trust each otherfor example, in a setting like
Afghanistan, with low state capacity and low trust amidst conflictbut such countries
are also often in the weakest position to effectively implement such technology.

Techno-Libertarian Evangelism?
One nascent phenomenon related to blockchain technology is the emergence of what
might be called techno-libertarian evangelismthe presence of blockchain
missionaries in developing countries articulating a technology-as-saviour and
markets-as-saviour gospel alongside an anti-state message. For example, in Ghana a
group called Africa Youth Peace Call 28 organized a 2015 Blockchain Land Title
Summer Liberty and Entrepreneurship Camp to discuss how land registry can be moved
from state institutions to blockchain ledgers. The groups stated objective is in teaching
free-market ideas and skills to the people of Africa, but despite appearing as a
Ghanaian organization, most of the groups board are foreigners, including American
free-market economists Ken Schoolland, Warren Coats and Louis James, and libertarian
activist Michael W. Dean (Africa Youth Peace Call 2015). The camp attendees included
the outspoken American libertarian activist and investor Roger Ver.

27
28

See http://factom.org/.
See https://www.cryptocoinsnews.com/liberating-northern-ghana-block-chain-model-africa/.

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Can Cryptocurrency and Blockchain Technology Play

a Role in Building Social and Solidarity Finance?
Brett Scott

The camp was also attended by Bitnation, 29 a group offering one of the most radical
articulations of the techno-libertarian message. Bitnation has presented a visionat
least in principleof hosting completely alternative state institutions (such as security
and legal institutions) on blockchain systems, describing states as governance service
providers that might be outcompeted by technological platforms. In the words of
founder Susanne Tarkowski Tempelhof, Bitnation is a Governance 2.0 Operating
System, designed to disrupt the nation-state oligopoly through offering more
convenient, secure and cost-efficient governance services (Prisco 2015a). Bitnation
posits a world where one might theoretically be able to opt out of states and buy
into new governance institutions in the same way one might select coffee from a
supermarket. This vision of a market in governance services only holds together if it
is assumed that markets can exist prior to political governance systems. This is in
contrast to those who argue that markets themselves are underpinned by political
governance systems that uphold the property rights that enable them to exist in the first
place.
More recently, Bitnation started offering blockchain services to refugees, 30 including a
blockchain emergency ID, Bitcoin visa cards and Bitcoin refugee aid. It has also entered
into a deal with the Estonian government to provide users of Estonias E-residency
system with a blockchain notarization service (Prisco 2015b).
These visions of coded governance (Wood and Buchanan 2015), blockchain law and
programmed smart contracts do not sit entirely comfortably alongside the traditional
legal contract profession. Contracts are representations of frequently ambiguous,
unpredictable and messy relationships between imperfect humans with imperfect
knowledge. Such relationships cannot easily be pre-programmed, and much of the work
of lawyers involves resolving and interpreting contracts in light of changing realities.
Building systems that seek to move away from such politicized negotiation can sound
utopian, but might equally lead to situations of inflexible technocracy.
Furthermore, while the technological novelty of blockchain systems is authentically
exciting, the darker side is that much of the more extreme rhetoric has hinged on
fixing human imperfection, rather than accommodating it. As argued in the essay
Visions of a Techno-Leviathan (Scott 2015a), the most ardent blockchain proponents
often present (whether advertently or inadvertently) a dim vision of human nature,
suggesting that people need to be protected from themselves by deferring responsibility
to trustless technological platforms that will enforce contract-based relationships
between atomistic individuals in an escape from community.

The Emancipatory Potential: Collaboration at Scale?

Nevertheless, there is a nascent trendfound within groups like Swarm, 31 Blockstream
and Ethereumto de-emphasize the focus on the trustless nature of blockchains, and
instead characterize blockchain technology as trust-enabling. Blockstream, for example,
claims to transform global systems of value exchange that, by design, make it possible
to trust anyone (Blockstream 2015). The idea is that in removing the need to trust
central authorities, blockchains could be platforms upon which build new forms of nonhierarchal cooperation between strangers. To understand this, though, it is necessary to
29
30
31

See http://www.bitnation.co/
See https://refugees.bitnation.co/
See https://swarm.fund/

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UNRISD Working Paper 20161

briefly look more deeply into the political dynamics of, and ambiguity within, the term
trust.
Normally, interpersonal trust is built through close personal contact, and in the absence
of such a relationship, such trust may be low. If, however, the need to build close
personal relationships prior to trusting someone is removed, it may be possible to extend
a form ofperhaps impersonaltrust to those you do not know.
In many modern societies this already extensively occurs through the use of formal
centralized authorities and formal legal contract systems that remove the need for
individuals to know each other personally before engaging in relations. You may not
know the shopkeeper, or the quality of his products, but you have a detached form of
trust in the consumer protection laws. An institutional trust layer stands guarantor to the
otherwise trustless relationship between you and the shopkeeper.
This dynamic applies also to normal monetary systems. A British 20 note is a piece of
paper representing a promise to pay, but in a world without strong state institutions it is
unlikely that a stranger would accept such a promissory note from another stranger in
exchange for real goods and services. Nevertheless, within the context of the British
state and legal system, I can hand over that paper bill to an unknown shopkeeper and get
coffee in return. The power of that note has been historically constructed via a
constellation of official state institutions (and non-state actors like commercial banks)
that I have an abstract form of trust in, and their perceived legitimacy (or hegemony) is
often so well engrained that such notes will easily circulate, especially once people
becomes dependent upon them for everyday exchange.
The trust dynamics are thus multi-faceted.
1. The note works through its embedding within an institutionalized trust system.
2. But that removes the need for any two people to have interpersonal trust.
3. The two strangers may experience this as a trustless or trust-free exchange at
an interpersonal level, but only because they both put trust in a higher-order
third-party guarantor.
4. In removing much of the need to trust strangers in commercial exchanges, we
might characterize such money as a force for atomizing and disconnecting
people from each other, weakening non-state community structures. 32
5. On the other hand, we might say that the exchange between two strangers
would not have happened if it had not been enabled by the money system.
From this framing, modern money is a trust-enabling system that gives rise to
transactions that otherwise would not exist.
6. Furthermore, in removing a source of potential tension between those
strangers, the money might even lay the groundwork for a pleasant, albeit
shallow, relationship.
The main point, though, is that while you can choose to characterize modern money as
either atomizing and alienating or as trust-enabling between two strangers, both
strangers will need to trust in the state institutions. It is this latter point that blockchain
proponents initially fixate upon. To frame it within the old view found in Hobbes
Leviathan, if people defer part of their freedom to a state in order to secure themselves
(and their property), they must implicitly trust that the social contract will be upheld.
32

Indeed, part of the rationale of complementary currency systems like timebanks is to rebuild community structures
that have disintegrated or weakened in the face of a modern scaled monetary economy.

14

Can Cryptocurrency and Blockchain Technology Play

a Role in Building Social and Solidarity Finance?
Brett Scott

For those who earnestly believe in the democratic political process, it is assumed that
the modern Leviathan of the democratic state can do this while representing the interests
of all. Conservative libertarians, however, often present the state as representing the
interests of corrupt politicians, 33 while left-leaning anarchists often present the state as
representing the interests of powerful capitalists.
Individualistic vs communitarian readings of blockchain technology
Thus, the original vision of libertarian blockchain evangelists was focused upon the
idea that blockchain systems based on cryptography could do away with the need for
trusted (or, perhaps more accurately, hegemonic) central intermediaries that would
normally be required to mediate relations between strangers. Thus, In cryptography we
trust has become a staple of Bitcoin bumper stickers and t-shirts, along with
proclamations that the technology is politics free.
The conservative libertarian vision, however, has often gone further to imply that the
reason why centralized institutional systems are flawed is because they are inevitably
controlled by untrustworthy and self-interested humans (e.g. the politicians, the Federal
Reserve board, the bankers). Furthermore, the reason why those humans are like that is
due to human nature, which is self-interested. Humans thus inevitably seek to gain at
the expense of others if given a chance. The implication is not just that some powerful
people abuse others who are weaker, but that all people seek to abuse all other people if
given a chance, a sentiment reminiscent of Hobbes war of all against all.
In this context, the cryptographic apolitical purity of a blockchain system appears not
just as a way to stop abusive people who control central institutions, but as a way to
once-and-for-all resolve the problem of how to establish contractual relationships
between untrustworthy human beings who seek out their self-interest. This is the neoHobbesian view of a blockchain system as the ultimate and perfected arbiter between
individuals who would otherwise be trying to swindle, defraud or damage each other.
This techno-leviathan subsequently lays the ground for a world where people will not
need to trust either each other or central institutions as they individually pursue their
self-interest.
It is possible, however, to build a communitarian anarchist reading of the same
technology. Social anarchist (or libertarian socialist) conceptions of the world do not
position human nature as fundamentally self-interested, but rather assert that people get
alienated and corrupted within the bureaucratic hierarchies and power dynamics of
large-scale capitalist system institutions. Anarchist traditions have thus often advocated
the need to develop smaller-scale non-hierarchical and solidarity-based systems where
people can experience their social and interdependent nature, and thereby achieve
emancipation.
The tantalizing open question for those inspired by this tradition is whether blockchain
systems can be a basis upon which people can easily interact with distant strangers for
collaboration at scale. Blockchain systemsat least superficiallyoffer a vision of
large-scale egalitarian self-organization far beyond the scale of ordinary anarchist
attempts at building cooperative communes. In this vision, the objective is to replace
hierarchal centralized institutions with decentralized ones, but the point of doing this is
33

The libertarian insistence on minimal government recognizes that the state is necessary to protect property rights
and security, but insists it should do nothing else, lest it fall prey to the personal interests and agendas of the people
who occupy its official positions.

15

UNRISD Working Paper 20161

not to once-and-for-all perfect a means for naturally self-interested individual humans to

contract with each other. Rather it is to allow naturally social beings to flourish and
collaborate with each other in a spirit of cooperation, not individualistic competition.
An interesting exploration of this is the Coin Center paper on Distributed Collaborative
Organizations, which describes explicitly collaborative entities that issue blockchainbased sharesor crypto-equity tokensthat give the holders ownership or membership
rights in a type of decentralized cooperative (Bollier et al. 2015). How such
organizations might end up looking in the real world remains to be seen, but they may
be an interesting new form to explore in the quest to build social and solidarity-based
finance. Can a city network of informal street vendors run a collective mutual insurance
pool between themselves using only their smartphones to interact with a distributed
ledger system, with no central financial institution involved? Can a regional mutual
credit systemeffectively a ledger of credits and debitsbe implemented in a
decentralized blockchain form?
The everyday pragmatics of decentralized blockchains
The individualistic and communitarian poles presented here are, in reality, often blurred.
For both, though, the deep question is how to get people who may be used to existing
systems of institutionalized trust to start using another one. How does a blockchain
system gain legitimacy and stability, such that users will adopt it and grow to trust the
safety of their position within it?
State systems are not immune from instability, but for many they provide the only formal
and relatively predictable everyday protections. The small business owners in South
Africa might not like the tax authorities and regulators, but they know their basic rights,
protections and responsibilitiesand the flexibilities of thoseand can engage in
commerce on reasonably solid ground. Blockchain systems, on the other hand, do not as
of yet offer such protection. It is telling that Ethereum deliberately and publically crossed
out the word safe in its 2015 frontier release of its decentralized blockchain software
platform. For the everyday pragmatic practitioner then, the impulse is to implement
blockchain systems very firmly within the existing institutional context of modern nation
states and the formal global economy, rather than outside of such systems.
A second question, for the communitarian conception in particular, is how you scale
cooperation up without lapsing back into a bureaucratic, alienating and unaccountable
system. Thus, the question is how to build decentralized governance systems that give
people true voice in the decentralized technology systems.
Within much original Bitcoin culture, the governance system was said to be based on
open source principles: in this conception, a project is open for anyone to get involved,
and if they do not like the direction they can fork the code to create something else. The
primary political action then is exit, but there is a chance for voice if you can influence
other developers on the forums and at the conferences. The power dynamics of this
process is often glossed over, but it is important to explicitly interrogate it. In much
open source software philosophy, it is often uncritically assumed that everyone has
equal power, despite the fact that certain individualsoften those with technical skills
or capitaldominate apparently open projects.
Indeed, despite being presented as democratic, open source projects have the potential
to turn into rigid concretized systems where each individual participant has little power
to change anything because there are no clear channels to affect change other than to
16

Can Cryptocurrency and Blockchain Technology Play

a Role in Building Social and Solidarity Finance?
Brett Scott

fork the code and create a competing structure, which is often an unsatisfactory
solution. 34 The countless attempts to create alt-coins based off the original Bitcoin
source code have often failed, and key high-profile developers 35 within the Bitcoin
community have effectively become unelected decision makers for all the legacy users
who need the system to be upgraded.
Hierarchal states and corporations may be imperfect and alienating, but they provide
theoretically at leastformal channels to change things that are not working. Smallscale anarchist communes who set themselves up in opposition to the hierarchy present
in such behemoths also install very explicit governance channels for individuals to raise
concerns. Any attempt to scale such a commune up through blockchain technology thus
also requires the simultaneous creation of decentralized governance systems 36 for
individuals to have a voice within the decentralized technology system. It is interesting
to note that the aforementioned Fair.Coop has explicitly been trying to construct such
governance systems in addition to developing the technology of Faircoin.

Recommendations for Further Research

This paper has attempted to provide an overview of some key dynamics within Bitcoin
and blockchain technology that may be of interest to social and solidarity finance (SSF)
practitioners. The technology is still new, but it is apparent that there are potentially
empowering uses of it in certain contexts. Nevertheless, while the community around
this technology is enthusiastic and experimental, it is still prone towards the elitist, techcentric outlook of disruptive technology start-up culture. A key role for SSF
practitioners then, is to consider how blockchain technology could be implemented with
sensitivity to the real struggles people face in implementing technology within diverse
cultural and political contexts. One blockchain does not fit all.
A good starting point would be to build new research into the following.
1. The ongoing development and deepening of global Bitcoin markets, tracing to
what extent those in developing country contexts are actually adopting it.
There is a definite need for baseline studies of usage, against which future
changes can be measured.
2. The challenges and potentials for the Bitcoin systems usage from a financial
inclusion perspective. This includes its use as a remittance system and as an
alternative bank account. This can be complemented with studies on the extent
to which blockchain-based property title systems (such as land registries),
have the potential to open up normal bank financing to people who otherwise
cannot get access to credit from financial institutions.
3. The extent to which Bitcoin as a currency system could interact in the future
with blockchain 2.0 smart-contract technology to create collectively-run (and
solidarity-based) financial schemes that do not rely upon normal financial
institutions. Might rural weather insurance systems be built upon mobile
phones? Can a farmers co-operative establish itself via a crypto-equity system?
34

35
36

This is especially difficult when it comes to network-based systems that gain their power from the amount of users
they have. A legacy network like Bitcoin has large numbers of users who are unwilling to switch to a better platform
unless everyone else does. This means nobody moves, and competition from alternatives is not an effective
regulatory force.
Such as Gavin Andresen.
For an interesting exploration of emergent e-governance platforms that may be used in such a process, see D-Cent
Project http://dcentproject.eu/.

17

UNRISD Working Paper 20161

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